Article by Hannah Wise.
Photo by Vernon Bryant.
DALLAS (The Dallas Morning News) — Almost a year after Gov. Greg Abbott signed a bill into law to "repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas," the state's Republicans got a look at one proposal for what a Texas Bullion Depository could look like.
Texas Precious Metals, a Shiner-based wholesale precious metals company, presented its proposal for the depository in a booth at the Texas Republican Party convention this week.
It's one of several companies that responded to state Comptroller Glenn Hegar's request for information in September. The comptroller's office used the request to get answers to questions that lingered after the ink had dried on the bill, including concerns about how the state could best secure and transport the bullion.
"What we have been very focused on is doing this right, and understanding all of the logistical technical myriad range of challenges when we are asking Texans to trust the state literally with their treasure," said Chris Bryan, a spokesman for the comptroller.
The bill, written by Rep. Giovanni Capriglione, R-Southlake, and sponsored in the Senate by Lois Kolkhorst, R-Brenham, calls for the depository to do more than store gold and precious metals for state institutions. It is intended to be open to companies and individuals to deposit precious metals there, open accounts and potentially pay for transactions with debit cards backed by their assets in the depository vault.
"We hope it will create synergy to make Texas a financial Mecca," Kolkhorst said.
The only state entity that holds a significant amount of gold is the University of Texas Investment Management Co., which, as of July, has around $600 million worth of gold bullion stored at HSBC Bank in New York.
The UT fund pays a storage fee at the bank. Last July, UT System spokeswoman Jenny LaCoste-Caputo told The Texas Tribune that moving the gold to Texas would "be seriously considered" if the storage fee were cheaper.
Such storage fees would be used to pay for the depository, Kolkhorst said. Her goal is for the depository to generate revenue at no cost to taxpayers.
Tarek Saab, chief operating officer for Texas Precious Metals and a former contestant on Donald Trump's The Apprentice, believes that is possible within the first year of the depository opening under his company's plan.
He described the proposed depository as a "monument of the state of Texas and the envy of other states, a recruitment attraction for business and an asset for domestic and international relations."
The company has proposed investing $20 million to build a 46,473-square-foot facility with 12-inch thick reinforced concrete walls and a roof built to withstand about 395,000 pounds — the weight of a Boeing 767.
Other companies, including armored transportation firm Brink's, say Texas does not need to build a new facility to get started on the depository outlined in the law.
"Brink's has several secure branch locations in the State of Texas so we would look to utilize existing facilities to provide the vault storage services," the company wrote in its response to Hegar, according to The Texas Tribune.
Saab criticized these proposals, arguing that a designated space at Brink's does not provided the layer of self-sufficiency the law establishes for the depository.
This week, Saab fielded questions from conventiongoers about the possibility that the depository was a step on the way to Texas seceding from the U.S. A secession proposal for the party platform was debated Friday at the convention but swiftly defeated.
"This is a great country," he said, adding that his company wants to ensure that Texans have the "appropriate resources in the state" in case something "unforeseeable may arise."
Saab pointed out that New York and Delaware have bullion depositories and "you don't hear talk about Delaware seceding from the Union."
Where the depository would be built is up in the air, Bryan said. Some think the depository should be in a single location that is easily accessible but secure. Others are advocating for a central branch with satellite locations throughout the state.
Anthem Vault, a Las Vegas-based company, called for "multiple vaulting locations throughout Texas to enable all Texans access to their bullion within a reasonable distance from their homes." The Tribune reports that Anthem Vault offered to create a network of "coin shops and retail storefronts" to accept deposits to the state depository.
"There is an element of, this is the interplay between there being a secure location and ensuring that Texans have access to it," Bryan said.
The comptroller is expected to issue a request for proposals by the end of the year that will outline the state's specific goals for the depository.